Gas and oil 'key to Bay growth'

An oil and gas industry would boost Hawke's Bay in a similar way to Taranaki - "higher incomes and low unemployment" - John Key said in a visit to the region yesterday.

A new economic report has commentators highlighting the potential of irrigation and an oil and gas industry to lift Hawke's Bay out of the economic doldrums.

The Ministry of Economic Development's Regional Economic Activity Report shows Hawke's Bay household incomes levels are below the national average - $72,200 compared with $80,600. The report shows the region's economy has contracted and population growth was unlikely in the next 20 years.

Released yesterday, the report also says Hawke's Bay's "volatility of employment" was shared by other climate-sensitive regions with significant horticulture sectors. Horticulture accounts for a fifth of Hawke's Bay employment but the majority of jobs are seasonal and poorly paid.

The Prime Minister said there had been no environmental problems in Taranaki and Hawke's Bay should be no different.

"But there are opportunities here for oil and gas," he said, adding that if the resources were pursued they would prove to be a boon for the province.

Hawke's Bay Chamber of Commerce CEO Wayne Walford said the report contained some good news.

"I'm pleased to see kids are leaving school with a higher level of NCEA and the report's list of business-growth initiatives," he said.

The report highlighted opportunities around improved roads and the proposed inland port at Whakatu, he said.

There were also "a multitude of opportunities around food processing".

"The Ruataniwha dam gives us a lot more options - we can get more from the land.

"We have all sorts of options to increase our profitability."

The report cited dairy and petroleum as a reason for Taranaki's strong performance.

Tukituki MP Craig Foss said petroleum was a proven road to success.

"Currently, the largest industries in Hawke's Bay are agriculture, forestry and fishing, manufacturing, and healthcare and social assistance - there are huge opportunities for oil and gas exploration," he said.

"The Ruataniwha dam project will also open up more land for farming, creating more jobs and boosting the Hawke's Bay economy."

Mr Walford said petroleum and dairy were "a clear opportunity but there has to be a balanced approach".

"We are not seeing disastrous effects of oil and gas in Taranaki - to me we should be seriously looking at it."

Anti-oil and gas exploration lobby group Don't Frack the Bay staged a colourful protest at East Pier where Mr Key had lunch.

"Too many things are just not right," group spokesman Paul Bailey said.

"We want more clarity about all this - the regulations are so loose and it is all happening too quickly." Hastings mayor Lawrence Yule said there was "nothing really new in the report".

"My summary: not the worst but could do a whole lot better."

Economic Development Minister Steven Joyce said the report was a valuable new tool.

"It shows the strengths, challenges and opportunities in the Hawke's Bay economy.

"In particular it highlights the region's strength in horticulture, the importance of Napier Port and opportunities to improve research and development," he said.

"It is designed to encourage more debate about what it takes for a region like Hawkes's Bay to be successful, and to more clearly link the decisions that are made by local stakeholders about resource allocation and usage to the number of jobs available in a region," he said.

"It is my expectation stakeholders will want to use it to compare and contrast the economic fortunes of different regions around the country, and ask themselves what lessons and opportunities there are for growth and jobs in their region.